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10 Tax Planning Strategies You Don’t Want to Miss

10 Tax Planning Strategies You Don’t Want to Miss

1. Establish an IRA.  Contributions up to $5,500 (or $6,500 if at least age 50) to a traditional IRA may be tax deductible if you have earned income and your adjusted gross income doesn’t exceed certain threshold amount

2. Contribute to your employer’s 401(K) plan.  You can have up to $17,500 (or $23,000 if at least age 50) withheld from your salary to reduce your taxable compensation and provide for future retirement needs.

3. Sell stocks that have incurred a loss to offset your capital gains and up to $3,000 of other income.  Any excess loss is carried forward to future years.

4. If you’re thinking about donating stocks to a charity, remember that if the stock has appreciated in value, donate the shares and you can take the fair market value of the donated stock as a deduction.  If you sell these shares before you donate them, you’ll have to report the gain of the shares on your return.  If the stock has decreased in value, sell the stock and donate the proceeds.  This way you get to report the loss on your return.

5. To avoid the underpayment penalty, make sure you pay in the lesser of 100% of last year’s tax liability (110% if your adjusted gross income was more than $150,000) or 90% of this year’s tax bill. 

6. Mail in your 4th quarter estimated state tax payment in December instead of January to get the tax deduction in 2014.  However, consult a tax adviser if you expect to be subject to alternative minimum tax.

7. Likewise, pay your January mortgage payment in December to take the tax deduction for the interest paid on the 2014 return.

8. Have you thought about whether you qualify for a home office deduction?  To get this deduction you need to use the office exclusively and regularly for business use.  You may deduct a portion of your homeowner insurance, utilities, and depreciation of the home.  You can also deduct any repairs or improvements done to the office.

9. If selling business assets or real estate, consider an installment sale or a like-kind exchange to reduce the gain recognized in 2014.  Such a move could also reduce your 3.8% net investment income tax imposed on net investment income for taxpayers with Modified Adjusted Gross Income exceeding certain amounts.

10. Taxpayers with income less than the federal poverty level ($15,730 for a family of two or $23,850 for a family of four, e.g.) may not be eligible to buy insurance under the Affordable Care Act.  To increase your income in order to qualify, consider withdrawing from a traditional IRA or converting a traditional IRA to a Roth IRA.

The tax law is complex.  If you need any help with your tax planning we’re always here to help you!


Allen & Company, PC  - a CPA firm serving Kennesaw, Marietta, Acworth, Woodstock and north Atlanta.  Providing accounting, financial statement audit, taxation, and advisory services for individuals and businesses.  Extensive experience working with franchised restaurants and other franchised businesses.